Apple: Jefferies sees pressure from video 'for years'
(CercleFinance.com) - Jefferies maintains its "hold" rating on Apple shares, with a target price of 160 dollars, after the tech giant announced plans to launch news, game and video services yesterday as the company makes an even bigger push into services.
"We note that company is unlikely to have much pricing power in video near term, as its content library currently pales in comparison to established peers Netflix and Disney," the broker writes in a note.
Jefferies thinks this business could, as a result, pressure the group's financials for years to come, as developing content can take considerable investment.
In addition, the broker thinks limited geographic rollout will limit the news services' contribution and notes that the arcade service will exclude the world's biggest free mobile games.
In a nutshell, Jefferies continues to expect that services revenue growth will be unlikely to offset iPhone unit declines in the near term.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
"We note that company is unlikely to have much pricing power in video near term, as its content library currently pales in comparison to established peers Netflix and Disney," the broker writes in a note.
Jefferies thinks this business could, as a result, pressure the group's financials for years to come, as developing content can take considerable investment.
In addition, the broker thinks limited geographic rollout will limit the news services' contribution and notes that the arcade service will exclude the world's biggest free mobile games.
In a nutshell, Jefferies continues to expect that services revenue growth will be unlikely to offset iPhone unit declines in the near term.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.